Unusual Property Title Types

Elderly homeowners often seek ways to structure ownership to save their heirs probate taxes.

There are several ways a person can take title to property. With large purchases like real estate, a prudent buyer should consult an attorney before deciding how to structure a property transaction. The type of title an owner has dictates specific rules to be followed regarding important matters like property transfer, inheritance taxes and vulnerability to lawsuits and judgments.

Land Trust

Many property owners find that a land trust offers many financial benefits worthy of consideration. By using a land trust to take title rights, the legal title to the property is held by a trustee. While the property owner retains all privileges, they are protected from claims against the property. Judgments and liens against an individual are typically attached to property in that individual's name. For this reason, a land trust is preferred by individuals who could be a target for legal action, such as entrepreneurs, contractors and other high-risk profiles. Another positive aspect of a land trust is the ease this legal structure affords owners who need to transfer ownership. If the owner dies, the property can be passed on to heirs without having the property tied up in a costly probate process. Cash sales of the property in a land trust also avoids tax consequences.

Joint Tenancy

Joint tenants own property as equal partners. When a joint tenant dies, his property rights transfer to the other joint tenants. While joint tenancy is most often a real estate arrangement, the property owned in a joint tenancy arrangement can be personal property as well. Joint tenants always hold an equal share of the property. No tenant will ever have a larger stake in the ownership of the property than another. All tenants have the right to sell their interest in the property.

Timeshare

Timeshare is a type of ownership that sells a consumer a week or more of vacation time in a home, to be used annually. Timeshare property has been marketed as a convenient and affordable way to save on vacation expenses and reserve the same perfect spot year after year. Millions of vacationers have bought timeshare property, happy to reserve their dream vacation for years to come. The downside of this type of ownership is that timeshares are hard to sell. In cases of divorce or changing interests, that timeshare that looked so attractive at one point in time, may become a burden that needs to be sold fast. While there are exchanges to help timeshare owners sell their interest in a timeshare property, it can take considerable time and patience to finally sell the timeshare rights.

Title by Contract

Contracts designate future ownership of property in many situations. The main advantage of title by contract ownership is that probate will not be an issue, saving heirs probate tax fees. Titles by contract are designated as transfer on death (TOD), payable on death (POD), and in trust for (ITF) contracts. These three types of contract ownership represent payable on death designations. Other title by contract examples include life insurance, revocable living trusts and annuities.

References

• "Full Count Investments"; Land Trust-The Real Estate Safety Net
• "The Free Dictionary"; Joint Tenancy